anti-trust law and the state-action exemption

NC Board of Dental Examiners

While the Court had to interpret a relatively new statute in King v. Burwell, it considered a far more established area of law in North Carolina Bd. of Dental Examiners v. FTC. [Read our Preview here.] The issue before the Court there was whether or not a board of dentists elected by other dentists to regulate the dental practice in North Carolina enjoyed the “state-action exemption” from the unfair competition restrictions in the Federal Trade Commission Act. A minority of Justices would have ruled that North Carolina has the authority to designate the Board a state agency regardless of its composition and therefore did not need to oversee its activity closely in order for it to enjoy state-action exemption. However, the majority concluded that, because a controlling number of the board’s decision-makers are active market participates in the occupation the Board regulates, the board can invoke state-action antitrust immunity only if it is subject to active supervision by the state, which it is not. Some commentators have noted that such boards are an increasingly common means of regulation for cash-strapped state agencies lacking the resources to regulate various industries, and this outcome may have implications well in excess of the attention it received. Others have noted the potential impact on state bar associations regulating the practice of law within each state.